GAM 470
Racetrack Betting
Following is how payoff calculations are done on win, place, and show bets.
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The total amount bet for a particular type of bet (show for example) is taken.
The track deducts its takeout, 17% for example.
Subtract wagers that won. This is the total dividend.
For place bets divide the amount in step 2 by 2, for show bets divide by 3. For win bets
leave as is. This will be the dividend per winning horse.
For each winning horse divide the dividend by the amount bet on that horse
Multiply the ratio from step 5 by $2.
Round the amount from step 6 DOWN to the nearest dime.
Add $2, because the original bet is returned.
If the bet was for other than $2 then multiply by (bet/2) to get the return of the ticket.
Example 1
The total amount bet on win bets on race 3 at the Aqueduct track is $80,000. The track cut is
15% on win, place, and show bets. $10,000 is bet on horse 6 to win, which it does. How much
does a $20 winning ticket return (including the original wager)?
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Total amount bet on win bets is $82,000
Subtract 15% for the track leaving 85%*$82,000 = $69,700
Subtract winning wagers, which go back to the winners, leaving $69,700-$10,000 =
$59,700
There is only one winning horse for win bets, so ignore step 4.
Divide winnings by amount bet for a ratio of $59,700/$10,000 = 5.97.
The winnings on a $2 bet are $2.00 * 5.97 = $11.94.
Round the winnings down to $11.90.
Add $2, because winning wagers are returned, for a return of $11.90+$2.00 = $13.90.
The bet was for $20 so the return is $13.90*($20/2) = $139.00
Example 2
The total amount bet on place bets on race 5 at the Colonial Downs track is $60,000. The track
cut is 18% on win, place, and show bets. The first and second place horses are 3 and 9. $5000
is bet on horse 3 to place and $8000 on horse 9 to place. How much does a winning $10 ticket
on horse 3 pay?
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Total amount bet is $60,000
After the track cut $60,000*82% = $49,200 is left.
Subtract the winning wagers for a total dividend of $49,200 - $13,000 = $36,200.
Divide by 2 for the dividend on each horse of $36,200/2 = $18,100
For each horse divide the dividend by the amount bet. For horse 3 this is
$18,100/$5000 = 3.62.
The winnings for a $2 ticket are $2*3.62 = $7.24
Round the winnings down to the nearest time for $7.20
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Add $2 for $9.20
Multiply by (10/2) for $9.20*5 = $46.00
Example 3
The total amount bet on show bets on race 7 at the Arlington Park track is $70,000. The track
cut is 17% on win, place, and show bets. The first, second, and third place horses are 2, 4, and
6. $8000 is bet on horse 2 to show, $10000 on horse 4 to show, and $5000 on horse 6 to show.
How much does a winning $5 show ticket on horse 6 pay?
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Total amount bet is $70,000
After the track cut $70,000*83% = $58,100 is left.
Subtract the winning wagers for a total dividend of $58,100 - $8000 - $10000 - $5000 =
$35,100
Divide by 3 for the dividend per horse: $35,100/3 = $11,700
Divide $11,700 by $5000 for the payoff odds: $11,700/$5000 = 2.34
The winnings for a $2 ticket are $2*2.34 = $4.68
Round down to the time for $4.60
Add $2 for the original wager for a return of $6.60 per $2 bet.
Multiply by (5/2) for the value of a $5 ticket: $6.60*(5/2) = $16.50